Checks to make sure order placed and price correct against purchase order

Checks number received against receiving document/shipping document forwarded from receiving (if not done by purchasing)

Flags problems for further action - holds

Okays payment of invoice

Manual:

Input to Confirmation Stage:

Invoice

Purchase order

Receiving document with shipping info

Output from Confirmation Stage:

Confirmed invoice

Disputed invoice

Input to Payment Stage:

Payment decisions

Outstanding payables file

confirmed invoices

credits

adjustments

Output from Payment Stage:

Invoices to be paid

Invoices to be held

Checks to vendor

Payment stage involved decisions on who is to be paid. Usually start out with money you have to pay bills and list of invoices to be paid. Decision instructions given to choose most advantageous use of money available (consider discounts, payment terms, credit status, age of bill etc.) Interactive process with management looking at different alternatives - some suggestions being rejected and others being forced. Results in invoices to be paid and invoices to be held.

NOTE: We are only looking at paying for merchandise. There is another whole side of this - payment for expenses to run company such as utilities, supplies etc.

Notes on computerized overview:

Purchase order file contains purchase orders received but not invoiced, partially received purchase orders, not received purchase orders.

Contains both receiving and pricing information so can be used to verify invoices

After received and invoiced goes to history file

PROBLEM: How to handle invoices that arrive before the goods have been received - invoice canít be confirmed - one option is to create a pending file for them

Processing:

Current invoices transactions go into process that checks for duplicates

P/O and Receipts go into process that matches P/O and Receipts

Open A/P receives those that match and can be paid

No receipts or problem goes on pending

Pending checked against P/O and receipt for transfer to A/P and then added to vendor owed on vendor file

Open A/P used to determine what to pay - flag those to pay and create cash requirements report

Cash and requirements as well as vendor file (checking owed, requirements here etc) manipulated to come up with invoices to pay - can create payment file during this processing

Using open A/P with flagged to pay or payment file checks and check register created - vendor file also involved

Create entries on open check file used for check reconciliation

Delete paid from open A/P and add paid to A/P history - if payment file it is used to update open A/P and A/P history - update vendor file as well - might use check file here

Things to watch out for:

does it handle retail, wholesale, service etc - A/P is very important to retailer and wholesaler